Constitution deadlock will hit economy hard: Experts

KATHMANDU, Jan 23:

Failure of political parties to deliver a new constitution within the stipulated timeframe might make a big impact on country´s investment climate, economic growth and the overall economic sector, according to industrialists and experts.

Senior economist Biswambher Pyakuryal said the failure to promulgate new constitution (on January 22) will dampen confidence of new entrepreneurs and industrialists. "Foreign investors might divert their investments in other safe and secure destinations feeling that their investments will not be safe here,” he added.

Pashupati Murarka, senior vice-president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said political parties´ failure has thrown the country´s economic development into uncertainty. "By failing to promulgate new constitution within the timeframe set by them, our political leaders have lost people´s trust," he added.

With a stable government in place and constitution-writing process on track, foreign investors had started visiting Nepal looking for investment opportunities. They made investment commitments worth billions of rupees after the new government was formed. "Now it will be difficult to convince them to put their money into Nepal," a dejected Murarka said.

Major investment commitments have come in hydropower sector. The nation has received investment commitments worth US$ 2.46 million in the hydropower sector. Similarly, tourism and hospitality sector has received investment commitment worth $400 million.

"The government was planning to usher in economic reforms. But the failure to issue constitution in time has pushed the plan on the backburner," lamented Pyakuryal.

Members of a high-level delegation, which is scheduled to leave for Malaysia after three days to apprise investors there of investment opportunities in Nepal, are in a state of confusion. Minister for Urban Development Narayan Khadka is leading the team. Govind Raj Pokharel, vice chairman of National Planning Commission, who is also in the team, told Republica it would be difficult to convince Malaysian investors. "We won´t have any words to convince them as our leaders have failed to promulgate constitution yet again," he added. "We also failed to convince our political leaders about the importance of economic development for job creation, economic growth and overall prosperity of the country. Constitution doesn´t concern commoners much."

Meanwhile, Confederation of Nepalese Industries has said widening gap between ruling and opposition parties does not bode well for political as well as economic sector. Issuing a statement on Thursday, CNI said it was disappointed political parties´ failure. "We were hoping for investment friendly climate, but we are seeing strikes, bandas, protests and donation drive," the statement added.

Source: Republica